After Michael Jackson's video "Black or White" aired last winter, the
company responsible for making 15 faces merge rapidly into one another
received a second job offer. A woman from the Midwest asked for help
in solving one of her life's greatest questions: Was she Elvis' lost
love child?

To find out, she asked Silicon Valley based Pacific Data Images to
fuse a photograph of her mother and one of the King to create the
hypothetical child of such a union. PDI declined, though they did
consider it more for the press than the profit. "We thought we should
do it free if we could get on the cover of World Weekly News," said
Jamie Dixon, the company's visual effects supervisor.

For more than four years, PDI has been "morphing," as the technique is
called, though until recently they only morphed inanimate objects. The
Jackson video, with its combination of a "warm fuzzy feeling and the
leading edge of technology," transfixed audiences, suspending their
disbelief and creating a sustainable fantasy, Dixon said. "There was
an odd innocence that really caught us off guard." But innocence is a
receding line in the world of special effects. It was once easy to
excite audiences with a toy King Kong clinging to the Empire State
Building, or thrill them with Darth Vader swinging his laser sword.
Digital technology has done away with those traditional smoke and
mirrors. Now audiences clamor for the impossible: heads twisting
unnaturally, metal men pouring themselves into planes, cows singing
Italian opera.

There's an inherent trap in visual effects: staying one step ahead of
audience boredom. Once you "morph," everyone knows about morphing. And
morphing and other special effects are not just for the privileged
few. A Macintosh based morphing software package is already on the
market for about $100 soon any child will be able to morph away a
Saturday afternoon.

A Script in the Desk Drawer

Carl Rosendahl knows all this. As PDI's president and founder, he's
well aware that his company can't specialize in a few effects or rest
on its laurels. That's why PDI, which was born in Silicon Valley,
opened an office in Hollywood last year.

On a fall morning, Rosendahl takes a break from thinking about the
company's future to work on an immediate problem: how to construct a
Canadian client's logo. He finishes his coffee, lifts his hands as if
they are claws, and begins to slink in slow motion across his office.
"How would a cougar move?" Rosendahl asks, turning his head right to
left. With the morning commute still in full swing, it's not the most
pressing question in Hollywood. But for Rosendahl, figuring out how to
make a stone cougar leap, cats talk, skeletons move and Michael
Jackson turn convincingly into a pile of sand is just the kind of
behind-the- scenes grunt work that aims to amaze the most jaded of
audiences.

Rosendahl, a wiry blond with a boyish face, massages his shoulder as
he rotates it forward. The cougar's shoulder joint is complicated, he
says. PDI could handle it in a number of ways. He mentions morphing
the image would be literally stretched from stone into live video of a
cougar. Or PDI could construct a digitized model and tell the computer
how to make the cougar move.

To create these effects realistically, PDI uses Silicon Graphics
computers, which are upgraded every year or so. The company writes its
own software, often tailoring it for the specific job at hand. The
Silicon Graphics machines, which have become a standard in the
computer animation world, let an animator create high-resolution, full
color, three-dimensional graphics in real time. The result is unique
storytelling tools that coax the students of "2001: A Space Odyssey,"
"Star Wars" and Nintendo to suspend disbelief long enough to accept,
for example, that the Pillsbury Doughboy can mambo.

As quickly as he transformed into a cougar, Rosendahl returns to his
normal self, a computer nerd and business pragmatist who ticks off
options and costs as rapidly as Ross Perot. In sneakers and a
sweatshirt, Rosendahl doesn't look old or officious enough to be
responsible for more than 70 employees, or to be working on film and
television projects with studios such as Universal, 20th Century Fox
and Sony. He looks more like a Boy Scout ready to lead a troop on
a
hike.

But in the world of computer generated visual effects, things are
never what they first seem. Rosendahl is no exception to that rule: He
dreams of morphing from a Stanford electrical engineering geek into a
studio executive, complete with trips to film festivals, lunches with
writers, and story pitch sessions with studio bigwigs. PDI won't
always be the hired gun for others with stories to tell. Rosendahl
wants to tell his own. "I don't want to be a Walt Disney I hope to
accomplish a fraction of what he did," Rosendahl said. "My goal is to
make PDI an animation studio instead of a production facility. We want
to use the technology as a springboard to tell stories."

But to be a storyteller, you need more than the ability to suspend
disbelief. You need a story. Fortunately, Rosendahl has a script.
Several of them. And they're not exactly collecting dust on his shelf.
Rosendahl is busy trotting his stories around Hollywood, doing what he
calls "the song and dance" sales job at the big studios. His current
favorite is about statues whose movements can't be seen by humans.
It's a favorite theme for animators: The characters only move when the
human dupe isn't looking. Rosendahl dramatizes how the computer
animated creatures come to life, move, and interact with live
characters. While he won't spill the whole plot, his script is rife
with a conservation moral a desire to hold on to the past in a world
where progress and technology sometimes destroy it.

So far the studios aren't biting. Some of PDI's critics, chief among
them rival effects-house Rhythm and Hues, say that's because PDI's
work in video and advertising has nothing to do with the world of film
effects. John Hughes, president and co-founder of Rhythm and Hues,
doesn't have a script in his drawer and doesn't intend to get one. PDI
might like to think Hollywood is its oyster, Hughes said, but
"something PDI does for a music video on video has nothing to do with
the film world."

So what really counts in Hollywood? " 'Terminator II' or the 'Abyss'
the effects in those films have had a profound impact on the film
industry," Hughes said.

Good Pay, No Limelight

In the meantime there's money to be made. PDI continues to make its
name by creating sleek graphics and technically interesting
commercials such as Dow's Scrubbing Bubbles and the agile,
mambo-dancing Pillsbury Doughboy.

Although there's enormous profit in such techniques, there's little
public glory. The Doughboy won't make PDI a household name. Often
commercial and video clients insist that PDI never admit its
involvement in some of its best projects. Advertisers and musicians
worry that too much exposure for PDI would destroy the magic of the
effect or that the effect itself will get too much attention. In other
words, you make the Doughboy sing and dance. We'll pay the bill and
take the credit.

Projects like the Doughboy don't give the company much of a creative
outlet (although several animators did take mambo dancing lessons).
But recent work with the late Muppet creator Jim Hensen, Barry
Levinson (director of "Avalon" and "Toys") and ex-Talking Head David
Byrne has given PDI a chance to work closer to the limelight.

In Byrne's video "She's Mad," PDI got a chance to show off its
smorgasbord of special effects. While Byrne laments a crazy love
relationship, his eyes fall out of his face, his limbs stretch and
twist unnaturally, and at one point he and his electric guitar
dissolve into a series of large orbs dancing to music. "[PDI's]
profoundly twisted sense of humor, combined with a gut wrenching
creativity, is lethal," Byrne wrote in a letter to the company. "No
one is bored and nothing is boring. I contort myself in their honor."

And Byrne got to contort himself cheap. Because the company helped to
shape the video instead of just following orders, PDI charged below
its normal book rate, Rosendahl said.

But you can't stretch and bend celebrities all day. With an eye to
becoming a full-fledged production studio, PDI has made several short
films itself, including "Gas Planet," a three-minute animation which
won the Best Computer Animation Short award at the Ottawa Animation
festival, and will be shown at the Sundance Film Festival in January.
PDI has submitted "Gas Planet" to the Academy for a possible Oscar
nomination. PDI's other animated films include "Locomotion" and "Opera
Industrial."

In "Gas Planet," three armless, speechless creatures with long snouts,
expressive eyes and suction cups for legs move inside a futuristic gas
world. In fact, the spewing of gas (the creatures' own) is the film's
main
action.

Some of the people behind this fart-filled animated short and the
Byrne video are gathered for a staff meeting later in the morning. The
company's office decor is what one producer describes as "nesting in
extreme." Rooms are cluttered with old movie posters, "Don't drink and
animate" signs, toys, guitars and even a windsurfing sail.

Several staffers sit on the floor, joking about the stock market crash
five years ago to the day an event that left PDI virtually unscathed.
PDI has grown more than 20 to 30 percent every year since the crash,
Rosendahl said, adding that the visual effects industry hasn't really
been hurt by the recession. And making animated short films doesn't
pay the bills at PDI, commercials do. The company has spent years
building a long list of clients willing to pay a few hundred thousand
dollars for the typical 30-second commercial. "One thing our industry
has been able to do is maximize an advertiser's bang for the buck,"
Rosendahl said. "When you only have 30 seconds to get your point
across, people like to watch morphs."

Rosendahl sits quietly through the meeting. He follows the
conversation with his eyes, never asking a question. His mind is
elsewhere, perhaps thinking about a lunch date tomorrow with a writer
who has a crazy idea to use visual effects in a baseball film. While
Rosendahl daydreams, Dixon discusses upcoming projects and their due
dates. The group is still trying to get the kinks out of "Toys," a
film starring Robin Williams. For "Toys," PDI has created a war room
scene where children are trained for high-tech combat by playing
"video war games" on 15 small, curved screens. (There's no strategy,
just blow up everything you see.) PDI created the action on the
screens and inserted them into the film.

A tall, longhaired man with an earring, Dixon dresses in a pink
T-shirt and worn jeans symbols of the company's laid-back personality
and what one partner calls its "egoless identity." (PDI does have the
wherewithal to hire one guy with a suit their vice-president of
marketing, Alan DiNoble. DiNoble used to work for Motown and knows the
vagaries of the entertainment industry.)

A seven year veteran of PDI, Dixon has helped develop a different kind
of "suit," one made especially for performance animation. Consisting
of Nintendo gloves and electrified cubes, the suit's magnetic field is
read by a computer. The wearer's mannerisms are captured as data,
which is then fed into an animation program. Byrne wore an older
generation of the suit for his video instead of seeing him dance, the
viewer sees a crush of small lights move with the distinctive
gyrations of the ex- Talking Head.

Dixon wore the performance suit in "Toys" to create the characters of
four generals sitting around a table discussing weapons systems.
Security guards watching on closed circuit TV see only the generals'
skeletons, giving the scene the feeling that it has been filmed by an
X- ray camera.

Performance animation is going to be the next craze, Dixon says. The
scene in "Toys" was his first real use of the technology. "It really
allowed me as an animator to be experimental. There was a real
immediacy to it," he said. "I wouldn't mind doing it again."

Back in the meeting, Dixon races through other projects. A dinosaur's
paw needs to be morphed into a human hand for the TV show "Dinosaurs,"
and cats, barn animals and goats have to learn to talk realistically
for four feature film bids. "It's the year of the talking animal,"
Rosendahl said later. "Don't ask me why," he said, lifting his hands
in the air. "It's just Hollywood."

Digital Visionary or Digital Spoiler?

It's lunch time at Raleigh studios, a small, gated neighborhood of
Wild West style houses and sheer glassy buildings where PDI has set up
shop. "You can't understand Hollywood unless you're here," Rosendahl
explains. With its feet firmly planted in Silicon Valley's technology,
PDI is extending its reach to the core of the entertainment industry.
Silicon Valley needs Hollywood's money, Rosendahl says, to keep
producing new technology. Rosendahl is hungry and because of that,
irritable, he says. He puts on his sunglasses and walks to a nearby
outdoor cafe. Young studio workers, fashionably dressed set designers,
and other film industry types are having lunch under an awning.
Rosendahl sees himself as one of the computer animation industry's
visionaries and defenders. It's a role he relishes, except when he's
viewed as some sort of god who can bring beloved actresses back from
the dead, or a demon who can manipulate reality and play with a
viewer's
mind.

Rosendahl also plays the industry's spoiler, unselling digitized
effects and shooting down what is not technologically possible.
Computer animation is not cheap and digitized effects are not
instantaneous, but Hollywood is constantly looking for that silver
bullet to cut costs, extras, and maybe even stars.

A common question from studio executives "Can we make a movie with
Bogart and Monroe together?" drives the normally cheerful Rosendahl to
forget his food and rant, not at the studio execs, but at the
unattainable effects the computer industry has promised them. "It's a
lie. It's not true. People know Monroe's dead. There's so much hype
from people on my side of the industry," he says. "There were promises
sold to Hollywood and Hollywood says, 'We've been lied to before by
you computer people.' " Computer animation and effects are not as easy
as people think, Rosendahl explains. "One good example is performance
animation. People are saying you can do real-time characters for
television now.

"Maybe the technology can get you close," he continues, "but if you
add on the realities of making it into a TV show, the budgetary
constraints, the image quality you need for broadcast television and
the time, it's currently outside of reality.

"A lot of people preaching this stuff have never done real production
and don't understand what's involved," Rosendahl complains. Alan
Citron, a business writer covering Hollywood for the Los Angeles
Times, believes that besides the hype surrounding the computer effects
industry, Hollywood is just generally resistant to change. "I think
people are coming around to the idea that computer effects might save
them money in the long run," Citron said. "It's one of those things
that's inevitable that people haven't fully accepted."

"People claim they want to make a synthetic actor," Dixon said,
echoing his boss. "People say you don't have to pay Arnold
Schwarzenegger $15 million, you can do it with computer graphics. But
if a person could make Arnold, they'd want $15 million for it. It's
still difficult to make a movie. You still have to be able to tell a
good story, and computer graphics doesn't change any of that."

But the question that rankles Rosendahl the most, the one that makes
him stand on chairs and uncharacteristically interrupt others, is
whether the new technology obscures people's ability to distinguish
fact from fiction. "No, no, no," is Rosendahl's answer. But others at
PDI disagree.

"We've narrowed the gap between fantasy world and reality," said
Richard Chuang, PDI's vice-president and co-founder who wrote much of
PDI's original software. "You can no longer believe what you see on
TV. The border is no longer real."

Glen Entis, PDI's executive producer, agrees. "[Digital computer
effects] tend to make images more disputable. People can become more
skeptical," Entis said, adding that it has become more of a challenge
"to keep audiences stimulated."

Is this something to be afraid of? Chuang thinks so. "PDI and others
with the right tools have the power to create a news story," he said.
"You can create a news story with actors," Rosendahl countered. "You
don't need a computer to do it."

Maybe so, but Chuang asked: "Now that we can simulate reality, will
people be interested in reality anymore?"

It's a question that concerns reporter Charles Solomon, who wrote
Enchanted Drawings: The History of Animation, and who covers the
animation industry for the Los Angeles Times and the Hollywood
Reporter. "Carl is too decent and too honest a person to worry about
this. But they can turn signs around in a shot so that you can't tell
it's been altered. The implications for propaganda purposes are pretty
staggering," Solomon said.

His mind on the future, Rosendahl is more pragmatist than philosopher.
After lunch he sits silently in a pitch-dark theater, viewing the
daily progress of PDI's projects.

Dixon holds a laser flashlight, pointing out scratches and
unintentional shadows in the film. When the "Toys" war room comes up
on the screen, dozens of boys are seen with their own private battle
screens.

"We can fix scratches, water damage and remove cables," Dixon says.
Improve bad acting? "Can't fix that yet, but we're working on it," he
says dryly.

While improving bad acting could make PDI millions, what Rosendahl
really wants to do with the company tell stories remains elusive.
There are scripts to be read, animated characters to develop and
studios to convince that a full-length, computer-animated feature film
is a good
investment.

Harder yet, PDI must convince a stodgy and conservative elite that
computer animation can be as versatile as traditional, hand drawn
animation. "What they have done has a place in animation," noted old
pro Bill Hannah, cochairman and founder of Hannah Barbara Productions,
who hired PDI to do the computer-generated Martian characters in "The
Last Halloween," a TV animated special. "But a good animator can put
more emotion in a character than a computer can."

Tell that to John Lasseter, an animation director with Pixar, who won
an Academy Award in 1989 for "Tin Toy," a totally digital animated
short. He says that PDI is gaining a reputation for being able to take
the coldness out of a computer effect. "It's not the tools you have,
but how you use them," Lasseter observed. "They've been around longer
than any other company, and it shows."

PDI may have been around the longest, but it was Pixar that inked the
first digital animation deal with a major studio. Pixar is currently
under contract with Disney to produce a full-length computer animated
feature. Details of the project have been kept secret.

Outside Looking In

The day is winding down, the traffic choppers dot the sky outside
Rosendahl's office. His window frames Paramount studio's water tower,
a Hollywood symbol and constant reminder that PDI is still a newcomer
trying to make it in the film industry.

It's not easy to walk into a studio with an animation idea that needs
a $20 million budget. "Producers say, 'Well, wait a minute. What's it
going to look like?' " Rosendahl says. "You can't say, 'well, it will
be a little bit like this movie and a little like that movie.' You
have to get the short made out of your own pocket and use it to sell
features."

In fact, Rosendahl recently had to pull back one of his scripts that
was languishing in "development hell" at Universal Studios. But
there'll be another day and another studio.

If PDI does succeed in making a full-length feature, it will be due to
the company's people, who try to use the technology to tell good
stories not to show off new software.

"We're the people who are always behind the scenes. You're never
identified when you walk down the street," Rosendahl explains,
grasping for some word, some way to dream the big dream without
sounding overly naive. But he is more understated. "I think
that's
changing."